How the High Court Sliced the Safety Net Against Knockoffs - Government Activity - Brief Article

Can you use the trademark laws to stop someone from making a product that looks like yours? The Supreme Court, in a case involving alleged knockoffs of a children's clothing line, has made it harder to do so, in a manner that more brand marketers need to be aware of. Citing the danger of impairing legitimate competition, the High Court reversed a $1.6 million jury verdict in favor of a children's clothing manufacturer whose designs were admittedly copied by a competitor.

The federal Trademark Act of 1946 (the Lanham Act) protects owners of "word marks" such as Pepsi and Levi's. It also protects owners of logos such as the Nike swoosh and the NBC peacock, and other "symbols" and "devices," to the extent these serve the same function as traditional trademarks--to identify the source of the owner's goods and distinguish them from those of others. (There is no requirement that consumers be able to identify the source, just that they know that all products bearing a particular mark come from a single source.)

The protected symbols and devices also include the "trade dress" of products. Trade dress initially referred to the way products are packaged or labeled--consumers have come to recognize the distinctive red box of Ritz crackers and the red-and-white cans of Campbell's soup as readily as the Ritz and Campbell word marks. Even the appearance of a restaurant chain can be protectable "trade dress" that others cannot copy (Whose mouth doesn't water for IHOP pancakes at the sight of the sloping blue roof?)

In the 1980s, courts began expanding the concept of trade dress to include the look of the product itself. The idea is that a distinctive design for a barbecue grill or a golf club, like its packaging, can indicate the source of the product. If you are an outdoor cook and see a semi-spherical barbecue kettle, you probably know it's a Weber. And, as with packaging, a competitor's use of the same design might confuse consumers as to who makes its products.

However, on March 22, in a decision entitled Wal-Mart Stores, Inc. v. Samara Brothers, Inc., the Supreme Court limited the protection given to a product's design, overturning an injunction and a jury award of almost $1.6 million to the children's clothing maker Samara Brothers. Samara Brothers manufactured a line of one-piece seersucker children's outfits decorated with appliques of hearts, flowers and fruits, which it marketed through J.C. Penney and other chains. Wal-Mart contracted a supplier to manufacture a similar line of children's outfits based on photographs of the Samara Brothers garments.

The Supreme Court ruled that while an ordinary word mark, and even packaging, can be instantly protectable as a trademark so long as it is "inherently distinctive"--meaning it does not merely describe a product, as "Wireless Communicator" would for cell phones, for instance--clothing and other product designs are not protectable unless they have been advertised and sold in the market and acquired distinctiveness in the minds of consumers. In other words, other makers can use the same children's shirt design you created unless the design has already become so well known that consumers assume any shirt with that design must be made or licensed by you.

The Supreme Court's reasoning was that clothing and other product designs, unlike traditional trademarks, do not merely identify the maker of the products but serve a functional purpose--either to aid the operation of the products, like uniquely shaped aerodynamic golf clubs, or to appeal to people aesthetically like attractive clothing or barbecue grill designs. The Court explained that "even the most unusual of product designs--such as a cocktail shaker shaped like a penguin--is intended not to identify the source, but to render the product itself more appealing."

The Court was concerned that if one company were given exclusive rights to an appealing design the moment it is marketed, it could bring "strike suits" in court to exclude new entrants from marketing competing products. The Court explained that "consumers should not be deprived of the benefits of competition" from the Wal-Marts of the world. Put another way, the Court is saying that unless consumers have truly come to identify the design with a single maker, one company should not be permitted to monopolize the market for a particular style of children's clothes. Or for penguin-shaped cocktail shakers.

This is good for new entrants to a particular market, of course. But what if you really created a distinctive design for your clothing line, cocktail shaker or other product? One answer is that modern media and technology may allow you to publicize your design so quickly and extensively that consumers will associate it exclusively with you before a competitor can develop a similar line.

The Supreme Court pointed to another possible answer as well: It noted that if a design is sufficiently novel or creative, it could be protected by a design patent, which would apply to inventions, or by copyright law, which applies to creative works. The protection afforded by these rights, unlike trademark protection, does not depend on consumer perception as to the source of the products. For example, copyright protection is a right granted in "original" tangible works, including sculpture and other visual works, which comes into existence from the moment of creation. While common clothing patterns probably lack the originality needed to qualify for copyright protection, the Court pointed out that Samara Brothers was able to obtain copyright registrations for some aspects of its clothing (such aspects could include fabric designs and possibly appliques).

The bottom line: While you may still be able to acquire trade dress rights in the appearance of your product--at least if it is sufficiently distinctive in the market and consumers recognize it as coming from only one source--the Supreme Court's recent decision in the Samara Brothers case means it may make sense to look into the availability of copyright and other forms of protection as well.

Craig S. Mende is a partner at the New York law firm Fross Zelnick Lehrman & Zissu, where he litigates and advises in trademark, copyright and Internet law matters.

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